The Swedish Patent and Market Court of Appeal (“Appeal Court”) recently decided on likelihood of confusion between CACAOLAT and the earlier registered trademark COCA-COLA (case number PMÖÄ 11663-18).
In September 2015, the Swedish Patent and Registration Office approved the international registration application filed by the company Grupo Cacaolat S.L. (“Cacaolat S.L.”) regarding the figurative mark CACAOLAT, in three different classes of goods; 29, 30 and 32, inter alia milk products, coffee, tea, non-alcoholic drinks and fruit juice. However, The Coca-Cola Company (“Coca-Cola Company”), which had registered the figurative mark and word mark COCA-COLA in the same classes, raised an objection due to likelihood of confusion. The Swedish Patent and Registration Office decided that there was a likelihood of confusion. The Swedish Patent and Market Court subsequently dismissed Cacaolat S.L.’s appeal. This decision was appealed to the Appeal Court.
The question of likelihood of confusion
In order to assess whether there is likelihood of confusion all relevant circumstances shall be considered. According to case law from the Court of Justice of the European Union (“CJEU”) there is likelihood of confusion if there is a risk that the public perceives that the goods or services emanate from the same company or that there is some sort of economic link between the two enterprises. An assessment must be based on the overall impression of the marks, in particular their distinctive and dominant components. The perception of the marks in the mind of the average consumer plays a decisive role in the global appreciation of the likelihood of confusion. The average consumer normally perceives a mark as a whole and does not proceed to analyse its details. The similarities between the marks and between the goods and services do also play an important role in the assessment. Less similarity between the goods and services may be offset by a greater degree of similarity between the marks, and vice versa. Finally, a mark’s distinctiveness and other relevant circumstances must be taken into account. The more distinctive the earlier mark, the greater the likelihood of confusion.
The development of case law in Sweden has followed this European approach. In the Jägarbrännvin-case, the Supreme Court held that the use of the trademark JÄGARBRÄNNVIN, was an infringement of the well-known trademarks JÄGERMEISTER and JÄGER, due to the likelihood of confusion, especially when taking into account that the older marks were well-known.
In the CACAOLAT-case, the Appeal Court started with comparing the two figurative marks since they were considered to be the most similar. CACAOLAT was written in the same style and similar font as COCA-COLA, however, the word was written in brown against a yellow background. The Appeal Court agreed with the assessment of the Swedish Patent and Market Court, which held that regardless of the differences in colour, there was a likelihood of confusion because of inter alia the similarities of the marks and the goods. This meant that there was an obstacle for registration of CACAOLAT in class 32, regarding drinks, and for some products in the classes 29 and 30, regarding food products.
Regarding some other goods in the classes 29 and 30, the Appeal Court went on to compare the figurative mark CACAOLAT with also the word mark COCA-COLA. The Appeal Court initially held that there were similarities between the goods represented by the marks. As regards the similarities between the marks, the Appeal Court held that both marks included eight letters, started with the letter C and continued with four similar letters: CACA vs. COCA. Another similarity was that both marks ended with: OLA. However, there were some differences. The alphabetical order differed, and one mark included a hyphen. Nevertheless, the overall impression was that there were similarities between the two marks.
The Appeal Court continued with assessing the distinctive character of COCA-COLA. The fact that COCA-COLA is a well-known trademark and has great distinctive character implied a greater risk of confusion. Even though the similarities between the marks were somewhat limited, the combination of the distinctive character of COCA-COLA and the similarities between the goods entailed that there was a risk of confusion between COCA-COLA and CACAOLAT. Thus, the Appeal Court dismissed Cacaolat S.L.’s appeal.
The distinctiveness of the earlier mark
In light of the CACAOLAT-case, one may consider to what extent a well-known trademark’s position on the market influences its scope of protection. In a similar earlier Swedish trademark case, which also involved the trademark COCA-COLA, a third party tried to register COLA-CAO. The question was whether the fact that COCA-COLA was a well-known trademark increased or decreased the risk of confusion. The Appeal Court held that COCA-COLA was well established on the market and should thus be granted a greater protection. For this reason, there was held to be a likelihood of confusion and the application to register COLA-CAO was rejected.
It has sometimes been argued that a trademark which is well-known on the market is less likely to be confused with other trademarks. If a person is continuously exposed to a certain mark, there is a great probability that a clear picture of the mark is established in the mind of the consumer and thus, the mark is easier to distinguish from other marks. From an empirical point of view, this could in theory indicate a more narrow scope of protection, since the risk of actual confusion would arguably be less.
On the other hand, it seems reasonable that a well-known mark, such as COCA-COLA, where the holder of the trademark has made great efforts such as investments and marketing, would deserve a greater scope of protection compared to lesser known marks. Such a principle would also be coherent with the more general idea that intellectual property law should reward the contribution made by the holder, in trademark law the investment in marketing and advertising efforts. This has also come to prevail as the rule of European trademark law, not the least in the case law of the CJEU. 
The claim that a well-known trademark should be given a more narrow scope of protection, since an average consumer knows the details of it so well, may perhaps be true, if you only look at actual confusion. However, if you look at the question of likelihood of confusion as a complex question of law, taking into account the normative argument that a well-known mark deserves a wider scope of protection, one must come to the conclusion, that the risk of confusion is increased, not decreased. In other words, the question of likelihood of confusion should be viewed as a complex and normative question of law and not as a simple empirical question of fact.
It is of course not always an easy task to define the difference between actual- and legal confusion and to determine if a question should be characterised as a factual or legal matter. The CACAOLAT-case clearly shows that, in Swedish and European trademark law, the concept of likelihood of confusion involves several different concepts, such as the similarities of the mark, the similarities of goods, the distinctiveness of the earlier mark, and other relevant circumstances such as trade channels and how the goods are bought and sold.
Such an assessment could appear to be of a factual nature, but it also includes normative aspects and a weighing of different elements against each other. The everyday use of a specific word can for example differ from the legal interpretation of the same word in respect of which it has a special judicial meaning. From a legal perspective, the purpose of the assessment may go well beyond the pure factual matter. Law is not only a matter of fact. Consequently, the Appeal Court has on several occasions held that likelihood of confusion is to be considered as a question of law and not a fact. The CACAOLAT-case is only one example of this well established principle.
These thoughts are of course not new. It has been argued on many occasions, in both English and German courts, that the risk of confusion is a question of law and not a matter of fact. As the judge Evershed MR has expressed: “The question of infringement, the question whether one mark is likely to cause confusion with another, is a matter upon which the judge must make up his mind and which, he and he alone, must decide. He cannot abdicate the decision in that matter to witnesses before him. On the other hand, equally it is true that he must be guided in all these matters by the evidence before him and where the evidence is that there has been no confusion that is a material matter which the judge must take into account.”. The decision of the Appeal Court in the CACAOLAT-case follows a similar way of reasoning.
Thus, a well-known trademark enjoys an extended scope of protection not only in the context of the extended protection for well-known marks but also within the context of the main protection against likelihood of confusion.